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Willis Announces Accountable Care Organization Insurance Liability Policy

As the health care industry moves to adapt its health care delivery models following the Patient Protection and Affordable Care Act of 2010, Accountable Care Organizations (ACO) have landed squarely at the center of the discussion. Many organizations are planning to form Accountable Care Organizations (ACO), defined as networks of health care providers that band together to provide the full continuum of health care services for patients. This model employs various payment methodologies to reward health care organizations such as hospitals, physicians and payors based upon the delivery of high-quality care to improve health outcomes while slowing growth in expenses.

While adoption of this model will vary in execution, forming an ACO will bring together affiliated and non-affiliated stakeholders in a variety of structures creating new risks and insurance challenges for health care organizations. Participants or owners of an ACO could face increased exposures in the form of:

  • Privacy Issues
  • Regulatory Risks
  • Vicarious Liability
  • Employment Issues
  • IT Network Development
  • Group Billing Challenges
  • Capital Investment Needs
  • Legal challenges created by interplay of State and Federal Laws
  • Distribution of Shared Savings and/or Loss Payments to stakeholders

Because these new exposures will be shared among multiple stakeholders, reliance on contractual arrangements and traditional insurance and risk management programs maintained by the individual stakeholders fall short of providing the necessary asset protection for these new structures. As an example, most risk management programs for health care organizations and physicians do not customarily include coverage for health care administration services such as claims administration, selection and de-selection of providers and/or distribution of payments to providers. In addition, the direct and/or vicarious liability created by the acts of the entity also creates coverage issues for individual stakeholders in their individual insurance and risk management programs.

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